[GNC] Question Re: Transaction Report on Expenses, All Children, for 2021
Adrien Monteleone
adrien.monteleone at lusfiber.net
Mon Mar 21 21:01:52 EDT 2022
Fran,
Do a bit of reading on 'Accrual' vs. 'Cash' accounting.
The Business Features of GnuCash are designed for the Accrual method.
With a bit of small fuss, they can be used for the Cash method too.
Expenses in the Accrual method are 'recognized' when 'incurred'. That
is, when you 'owe' the money to whomever you purchased something (good
or service) that is when you incurred the expense, not when you happen
to get around to physically paying their invoice. The idea here is that
you are recording expenses in the same period that you use those
expenses (good or services) to generate revenue.
A similar process takes place with Sales. You 'earn' Revenue when the
sale is made (usually upon 'good delivery') and the actual timing of the
receipt of payment is not part of when you made the sale. (your vendors
'earn' their revenue when they deliver a good or service to you, not
when you pay them, which is why you incur the expense at their point of
'good delivery' as that is when you legally 'owe' them.)
Accounts Receivable and Accounts Payable are used to track actual
payments made and received, while still recording the expenses and
revenue when they are incurred and earned.
Now, read up on the 'Matching Principle' of accounting. It will explain
why it is done this way.
With the Cash method, you aren't concerned with when you incur expenses
or when you earn revenue, but when you make payment or receive payment.
For businesses that pay for inventory up front, and receive payment at
the exchange of goods, this makes sense.
For businesses that purchase on credit and sell on credit, it is a mess
and makes little sense. (it also makes it difficult to analyze your
historical sales activity and expenses, because they don't match each
other.) For this reason and for these cases, Accrual accounting is
employed rather than the Cash method.
-----
What it appears you are describing is that you are using the Business
Features as normal, and thus using the Accrual Method, but for some
reason (not yet explained) you want an Expense Report on a Cash Basis.
That's fine, but beware, if your accounting is supposed to be on a Cash
Basis, you should probably alter your GnuCash workflow to assist with
this and make reporting easier and more accurate. And if not, then sure,
you can still generate Cash Basis reports as you found out.
Regards,
Adrien
On 3/18/22 9:50 AM, Fran_3 via gnucash-user wrote:
> My Bad. Expenses are created when the bill is posted... not when it is paid.Here is how it works...1 - Get Bill from Vendor X2 - Post bill from Vendor X to AP3 - Charge bill to Expense Acct Whatever4 - Pay Bill and Charge Checking Account and relive AP
> So to get all expenses paid in 2021 you would create a Transaction Report on the Checking Account for the time period you desire...And set the Sorting Option Primary Key to "Other Account"And then lookup Accounts Payable Total in the results.
> And if you know how you could set the Transaction Report Filter to only show Checking Transactions charged to Accounts Payable...I'm posting another thread on that... more properly titled... to help other poor souls... like me :-)
>
>
> On Thursday, March 17, 2022, 07:58:14 PM EDT, Fran_3 via gnucash-user <gnucash-user at gnucash.org> wrote:
>
> Situation:
> We posted a bill in 2020 but paid it in 2021.
> I need to create an Expense report for all expenses paid in 2021... regardless of when the bill was posted...
> My attempted solution:I created a Transaction Report on "Expenses" with "All Children" selected...And with a date range of 1/1/2021 to 12/31/2021
> The Problem:The payment for the 2020 bill does not show in the report...Even though the expense was paid in paid in 2021.
> How can I create a report that will show all expenses paid in 2021 regardless of when the bill was posted?
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